* Dollar drifts away from two-month peaks
* Gold up after falling for six sessions since May 17 (Updates prices, adds comment)
By Clara Denina
LONDON, May 26 (Reuters) - Gold rose on Thursday, moving away from a seven-week low hit in the previous session, as the dollar extended losses after the release of U.S. economic data.
Orders for long-lasting U.S. manufactured goods surged in April on strong demand for transportation equipment and a range of other products, but continued weakness in business spending plans suggested the manufacturing rout is far from over. gold XAU= rose 0.1 percent to $1,224.96 an ounce by 1414 GMT. The metal had fallen to its lowest since April 6 at $1,217.25 on Wednesday. U.S. gold GCcv1 was up 0.2 percent at $1,225.60.
"Gold has entered a phase of consolidation due to stronger views that the U.S. Fed will raise rates this summer," said Carlo Alberto de Casa, chief analyst at ActivTrades.
"Today we are just seeing a technical rebound after the metal touched $1,217 yesterday, where the next chart support stands."
The prospect of an interest rate rise, as indicated by U.S. Fed meeting minutes released last week, and a strengthening dollar have pushed gold down 5 percent so far in May, putting it on track for its biggest monthly decline since November.
Higher interest rates increase the opportunity cost of holding non-interest yielding gold.
Other data on Thursday showed new applications for unemployment benefits fell more than expected last week, indicating the economy is gaining momentum after growth braked sharply in the first quarter.
St. Louis Federal Reserve President James Bullard said on Thursday that U.S. labour markets are relatively tight and may put upward pressure on inflation. Reserve Board Governor Jerome Powell, a permanent voter on the Fed's rate-setting committee, is scheduled to speak later on Thursday.
The market will also monitor Fed Chair Janet Yellen's comments at a panel event hosted by Harvard University on Friday. consumer China's gold imports via main conduit Hong Kong dipped in April from a three-month high in the previous month, data showed on Thursday. has risen more than 15 percent since the start of the year, as investors bought on concerns about global economic growth and the volatility of stock markets. But physical demand from main markets China and India, which together account for more than half of global consumption, has been weak.
"The absence of physical demand is a bit alarming in a market where price is so much driven by investment, which can flip very easily," Natixis analyst Bernard Dahdah said.
"A drop in gold in response to higher U.S. rates will be quite sharp one."
Among other precious metals, spot silver XAG= rose 1.1 percent to $16.40 an ounce, platinum XPT= gained 1.2 percent to $1,000.25 and palladium XPD= jumped by 3 percent to $542.22.